Yahoo Finance S&P Global (SPGI) Gains From Acquisitions Despite High Expenses
S&P Global SPGI stock has jumped 23.6% in the past year, outperforming 20.9% growth of the industry it belongs to.
SPGI reported mixed fourth-quarter results, wherein earnings per share of $3.13 missed the Zacks Consensus Estimate by 0.6% but increased 23.2% year over year. Revenues of $3.2 billion surpassed the consensus estimate by 0.5% and improved 7.3% year over year, backed by strong performances in all divisions.
How is S&P Global Doing?
SPGI has received a boost from service launches that influenced its market standing positively. Supply Chain Console was introduced by S&P Global Market Intelligence, providing a comprehensive view of supply-chain dynamics. The S&P Global Canada Services Purchasing Managers' Index was launched as well. Platts (S&P Global Commodity Insights) added daily assessment of Southeast Asia LNG cargo to improve price transparency.
S&P Global pursues growth, innovation and the expansion of its content through strategic acquisitions. In 2023, Market Scan Information Systems and ChartIQ were acquired to enhance mobility services and strengthen S&P Global Market Intelligence, respectively. In 2022, the company improved second-party opinions by acquiring Shades of Green business. The merger with IHS Markit, completed on Feb 28, 2022, enhances data and analytics offerings.
S&P Global Inc. Revenue (TTM)
S&P Global Inc. revenue-ttm | S&P Global Inc. Quote
S&P Global’s strategy to reward its shareholders through share repurchases and dividend payments is impressive. In 2023, S&P Global paid out $1.1 billion as dividends and $3.3 billion as share repurchases. In 2022, S&P Global paid out $1 billion as dividends and $12 billion as share repurchases. In 2021, S&P Global returned $743 million to shareholders in the form of dividend payments. These initiatives not only instill investor confidence but also positively impact the bottom line. Partly due to this positive, S&P Global shares have gained 23.6% in the trailing 12 months.
S&P Global is seeing a rise in expenses due to investments in ongoing productivity programs, higher compensation costs due to investments in growth initiatives, and the completion of acquisitions and higher incentive costs. In 2023, total expenses increased 3.4% year over year. Hence, its earnings are likely to remain under pressure in the future.
S&P Global's current ratio (a measure of liquidity) at the end of fourth-quarter 2023 was pegged at 0.84, lower than 0.92 at the end of the preceding quarter and the year-ago quarter’s 0.94. A current ratio of less than 1 indicates that the company may have problems paying off its short-term obligations.
Zacks Rank and Stocks to Consider
S&P Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Core & Main CNM and The Hackett Group HCKT.
Core & Main flaunts a Zacks Rank of 1 (Strong Buy) at present. CNM has a long-term earnings growth expectation of 12%. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNM delivered a trailing four-quarter earnings surprise of 1.5%, on average.
The Hackett Group currently carries a Zacks Rank of 2 (Buy). The company has a long-term earnings growth expectation of 13.5%.
HCKT delivered a trailing four-quarter earnings surprise of 2.6%, on average.
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S&P Global Inc. (SPGI) : Free Stock Analysis Report
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